In both arthropods and chordates, an activity gradient of a member of the Bone Morphogenetic Protein family patterns the embryonic dorsal-ventral axis. In Drosophila, the decapentaplegic (dpp) gene is expressed at uniform intensity over the dorsal 40% of the embryo but functions in a dose-dependent fashion to promote dorsal structures. Visualization of secreted, reinternalized Dpp protein indicates that during late blastoderm stage Dpp becomes concentrated in the dorsal 10% of cells by a process of directional diffusion through the extracellular space. Understanding this novel mechanism of directed ligand transport could offer insights into the establishment and interpretation of positional information during vertebrate development. In its most simple form, this process involves formation of a protein complex that sequesters Dpp from its receptors, free diffusion of that complex through the extracellular space, and ultimate proteolysis of the complex, allowing ligand release and signaling. The experiments in the first specific aim both seek to gain greater insights concerning the function of individual components of this transport system and address the fundamental question of the initial asymmetries that are necessary for generation of directional transport. While these extracellular proteins are critical for the establishment of pattern, phenotypic analysis of specific mutations in intracellular components of the Dpp signaling pathway strongly suggests that regulated receptor turnover, possibly based on prior signaling strength, may also contribute substantially to the establishment of the final pattern of ligand localization. In the second specific aim, reagents will be developed that specifically visualize cell surface bound or reinternalized receptors. These tools will then be used to determine whether Dpp signaling during early blastoderm feeds back to control receptor levels later during development by examination of receptor distribution in embryos lacking ligand, and in embryos mutant for downstream components of the signaling pathway. The third aim is explore the role of endocytosis in the control of Dpp signaling, with the ultimate goal of coupling an understanding of the cell biology of this process with the developmental biology of early embryonic patterning. Reagents that mark specific endocytic compartments will be used to determine the subcellular location of internalized receptor-ligand complexes. Specific steps in endocytic trafficking will be perturbed and their effects on Dpp signaling will be examined. Lastly, a recent model for endocytic control of TGF-beta signaling formulated in vertebrate cell culture will be tested in the context of the whole organism. [unreadable] [unreadable] [unreadable]